National Bank of Canada expects to report charges of approximately $158 million after tax ($237M before tax) for the fourth quarter ending Oct. 31, the bank said Wednesday.

The expected fourth-quarter charges includes a charge of $78 million after tax ($117 million before tax) related to asset-backed commercial paper (ABCP), a restructuring charge of $44 million after tax ($66 million before tax) related to the transformation plan announced in September, and $36 million after tax ($54 million before tax) for a write-down of tangible assets.

The bank said fourth quarter earnings are expected to reach $70 million, or 37¢ a share. On an adjusted basis, earnings should be $228 million, or $1.36 per a share, up 5% from the fourth quarter of 2007.

“Despite exceptionally difficult financial conditions on a global basis, we delivered better results in 2008,” said Louis Vachon, president and CEO, in a release. “The contribution from the personal and commercial business segment increased, the wealth management results remained stable and the performance of financial markets was very good given the difficult environment.”

The fourth quarter ABCP charge includes valuation adjustment, financial costs, hedging gain and professional fees. To date, write-downs related to ABCP represent a 32% valuation adjustment to the total notional position held by National Bank, the bank said.

As of Aug. 1, the bank reclassified the ABCP of a carrying value of $119 million that was classified in “held for trading securities” to “available for sale securities” on the balance sheet. That reclassification had no impact in the fourth quarter of 2008. No other portfolios were reclassified in “available for sale securities.”

In September, the bank announced the implementation of a restructuring plan. “We simplified our organizational structure and that has affected our fourth quarter results. However, this initiative will enable us to reallocate resources to better serve our customers,” added Vachon.

The tangible assets write-down is mainly due to the decision of the Canadian Payment Association not to proceed further with the Truncation and Electronic Presentement Project, the bank said. In addition, the bank has decided to realign resources in order to optimize IT initiatives in line with the group’s global strategy.

National Bank will release its fourth quarter and year-end results on Dec. 4.

IE